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What are the pros and cons of monopolies? What are the pros and cons of monopolies?
Monopolies are good for the economy Monopolies are good for the economy
Monopolies are damaging to economies Monopolies are damaging to economies
Monopolies stimulate capitalism Monopolies stimulate capitalism
Monopolies can invest in innovation Monopolies can invest in innovation
Monopolies reduce entrepreneurial activity Monopolies reduce entrepreneurial activity
Monopolies reduce wages for workers Monopolies reduce wages for workers
Monopolies lead to higher prices Monopolies lead to higher prices
Monopolies reduce innovation Monopolies reduce innovation
Oligopolies behave like monopolies Oligopolies behave like monopolies
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What are the pros and cons of monopolies?
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Monopolies are good for the economy

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Monopolies stimulate capitalism

Without monopoly type profits, there would be little incentive to innovate.
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The Argument

Supernormal profits lead to new entrants in industries and the desire to get rich. In many industries, the first mover may enjoy the benefits of coming up with a profitable idea. The lure of profits will drive others to enter later. Without monopoly type profits, there would be little incentive to innovate. In some cases, this initial monopoly is driven by patents/copyrights. Society has chosen to reward patents for centuries in order to motivate inventors to innovate. Research and development is costly and uncertain. Monopoly profits are a just reward for innovation.

Counter arguments

Premises

Rejecting the premises

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This page was last edited on Sunday, 4 Nov 2018 at 16:56 UTC

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